First Read: TVS Motor Company "Q4FY26: When the going gets tough, the tough..."

Research evidence excerpt

First Read: TVS Motor Company "Q4FY26: When the going gets tough, the tough..."

% above our estimates/consensus. Raw material

03/27E 102.32 103.46 1 92.64

costs increased by 30 bps QoQ and 160 bps YoY, while staff costs rose 10 bps 03/28E 127.90 130.73 2 112.64

sequentially but declined 20 bps YoY. Continued focus on cost control led to other

expenses declining by 30 bps QoQ and 60 bps YoY, resulting in broadly flat margins Pramod Kumar

sequentially and an expansion of 60 bps YoY (adjusted for the prior-period PLI benefit Analyst

recorded in Q4FY25). pramod.kumar@ubs.com

+91-22-6155 6063

Key earnings call takeaways Vedant Kshatriya

Associate Analyst1) The company expects the industry to grow at strong single digits in FY27 with them

vedant.kshatriya@ubs.com

outperforming the market; 2) Export momentum remained strong in Q4 across key +91-22-6155 6008

markets, and the company expects this trend to continue going forward; 3) The

commodity cost impact is estimated at ~3–5% in 1QFY27, with the company able to

pass on ~35% of the increase to customers; 4) FY27 capex guidance stands at Rs 35bn,

with ~Rs 20bn allocated toward investments in subsidiaries and the balance toward

capacity expansion; 5) The EV monthly run rate is currently ~40K units, with plans to

ramp it up to ~50K units per month; 6) TVS Credit Services’ loan book size stands at ~Rs

306bn, reflecting a 15% YoY increase.

Valuation: Retain Buy and raise PT to Rs 4,620

We value the core business at 22x 1Y forward EV/EBITDA at Rs4,270/share. We assign

value of Rs350/share for inv. in sub./ associates and roll forward our estimates to FY28E.

Highlights (Rsm) 03/23 03/24 03/25 03/26E 03/27E 03/28E 03/29E 03/30E

Revenues 263,781 317,764 362,513 472,703 564,383 638,532 735,843 860,370